Buying a house is one of the decisions to make in life, it is a significant decision that involves a lot of considerations. When you want to find the right mortgage resources to finance your mortgage, here are some of the factors you need to consider to avoid troubles.
Compare Different Sources
The are numerous Mortgage lenders. So, contact as many of them as possible and compare their packages, terms and conditions, and how they operate. From your findings, you will have an idea of the type of mortgage and rate to consider.
It is essential that you consider the fee attached to any mortgage product. It is possible for a product to have a low rate but higher fees. You should be meticulous about this to prevent paying exorbitant fees.
Total Payable Amount
Knowing how much you need is required to have an idea of the total sum of money you will have to pay; mortgage and all associated fees. Some lenders request for an upfront payment of set-up fees while others factor it into the entire mortgage.
Watch out for special tie-in declaration that keeps you tied to the contract for a specified amount of time. If you decide to quit the contract before the time agreed, you are may have to pay a redemption penalty. Know the tie-in period and the consequences of quitting abruptly or early.
Read the contract critically to know the fees you will pay if you decide to change to another lender after your initial mortgage deal ends. Some lenders state this fee at the beginning of the mortgage while other disclose the fees at the end.
Type of Mortgage
The mortgage can be open or closed. With the open mortgage, you can settle the mortgage in full at any time; but this comes with higher interest rates. A closed mortgage allows you to pay back just part of the principal at a specified time, but there may be penalties.
On top of that, you can choose to have your mortgage rate fixed or variable.
Affordability and Convenience
Critically consider the amount you want to borrow and what you can afford conveniently. Do not obtain any that will be too difficult for you to pay or be a burden to you.
Disclosure of Information
Before choosing a mortgage lender, consider their willingness to disclose valuable information to you – lenders that do not provide clear explanation do not deserve to have your business.
Do not rush into any mortgage loan, consider all the points discussed to make an informed decision. Our advice is to deal with a mortgage broker to help you find the best solution that works for you.